AEA Survey Shows Optimism, Increased Cost of Business

 - December 1, 2022, 10:57 AM
Avionics repair stations are optimistic about the coming year. (Photo: Spirit Aeronautics)

The Aircraft Electronics Association’s 2022 Rate and Labor Survey underscored the buoyancy of the market, with more than 60 percent of U.S. avionics repair stations expecting growth and success in the coming year. At the same time, the survey highlighted the increased cost of business, with more than half, and as many as two-thirds in certain regions, increasing shop rates and the overwhelming majority upping compensation.

“The results of this year’s survey aren’t surprising when you consider the impact of inflationary pressures and the extraordinary effort required to manage and maintain the flow of products from OEMs that continue to deal with supply constraints and the increasing cost to products,” said AEA president and CEO Mike Adamson in an Avionics News article about the survey that was released today. “Repair stations continue to report a positive outlook in spite of the ongoing workforce challenges to recruit and retain high-quality technicians.”

Only 7 percent of respondents expected business to decline, and they cited reasons such as inflation, gas prices, supply-chain delays, and a volatile stock market. Another 33 percent expect business to remain the same, while in Canada 53 percent expect growth and in the South Pacific 56 percent were optimistic.

Those seeing growth credited decreased competition, product availability, facility expansion, and additional personnel and services as underlying reasons. Many of those seeing business remaining flat say their businesses have found a “sweet spot” with a manageable balance of workload, backlog, facility size, and staff, AEA reported, calling this “a surprise.”

As for shop rates, 52 percent of shops in the Western U.S. region reported increases of an average of 6.8 percent. However, overall average install rates in the region fell 0.38 percent in 2022. Meanwhile, two-thirds of the shops increased salaries, a decline from 74 percent in 2021.

In the Central region, two-thirds increased shop rates at an average of 8 percent, with the service rate seeing the biggest hourly jump of 9.97 percent, to $122.14. Some 80 percent increased salaries, but benefits fell across the board.

In the Eastern region, 61 percent reported shop rate increases, down from 66 percent last year, and 85 percent increased salaries. Shop rate increases averaged 7 percent. Nearly three-fifths of shops offered incentive pay, an increase of a little more than half last year.